Donor Advised Funds are a popular charitable giving tool. And right now is a perfect time to evaluate this planning strategy for your clients.

In recent years, Donor Advised Funds have been one of the fastest-growing philanthropic planning tools in the marketplace. These funds are popular because they allow an individual or family to make a tax-deductible transfer that qualifies as a charitable contribution, and then recommend grants to favorite charities from the fund when the time is right. A Donor Advised Fund operates a lot like a checking account for charity, and it is established according to IRS guidelines that provide tax advantages for the donor as well as administrative efficiencies.

Amid the Covid-19 pandemic, giving from Donor Advised Funds at community foundations is accelerating. This is creating a significant boost for nonprofits and people in need. Indeed, the global healthcare crisis is precisely the reason that many donors establish Donor-Advised Funds in the first place: to be ready to give when needs are the highest.

According to a recent survey conducted by the Community Foundation Public Awareness Initiative, grants from Donor Advised Funds among the 64 community foundations surveyed increased nearly 60% in March and April 2020 compared with March and April 2019. 

Consider working with your clients to activate their existing Donor Advised Fund or to establish a new fund with CFAAC to help respond to the needs created by Covid-19. A donor-advised fund helps the community right now and allows your clients and their families to build a legacy to address the community’s needs during future crises.